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Original poster

What happens to contract when a company goes into administration?

14 replies

mirages08 · 26/05/2023 18:29

I've looked at the gov.uk pages which seem to say that the appointed administrator can sack anyone and not honour work contracts?
Is that right?
No idea what's happening atm and it's pretty stressful:(

OP posts:
Brendabigbaps · 26/05/2023 18:31

Would you really want to carry on working for a company that’s in administration? You run the risk of nit being paid for your time

Mindymomo · 26/05/2023 18:34

An Administrator runs the Company and will try and find another Company to take it over. They can make employees redundant and they should contact all staff to let him know what is required of them.

Upsizer · 26/05/2023 18:37

do you mean employee contract or contractor contract or client contract? Essentially it’s likely that you won’t get any more money than you have now, either way.

Original poster
mirages08 · 26/05/2023 20:25

Sorry, the job contract to be clear.

Does statutory redundancy pay apply?

OP posts:
FatAgainItsLettuceTime · 26/05/2023 20:31

They can make you redundant and if they can't afford to pay the redundancy it would come from the government.

More info here www.gov.uk/your-rights-if-your-employer-is-insolvent

OpalescentFly · 26/05/2023 20:37

If you get made redundant, stautory redundancy should apply. This would be covered up to a cap by the insolvency service. You also should get any money owed, holiday pay, and pay in lieu of notice. These are all capped at a weekly amount.

Cindy1802 · 26/05/2023 20:40

I would say that if they are in administration and taken over by administrators rather than being bought over by someone else, i would assume they will not be able to pay you all out and you will end up with stat redundancy.

It happened to me a few years ago - however they made us redundant on the spot with no notice - and we all won a court case and got a payout a few years later. They have a legal requirement to consult with you, and the time period depends on how many people work for the company. All the info should be online

Okshacky · 26/05/2023 20:40

Are you an employee?

Original poster
mirages08 · 26/05/2023 21:31

Yes an employee of many years standing - statutory redundancy pay is capped at 20 years max I believe?

OP posts:
Original poster
mirages08 · 27/05/2023 10:28

Cindy1802 · 26/05/2023 20:40

I would say that if they are in administration and taken over by administrators rather than being bought over by someone else, i would assume they will not be able to pay you all out and you will end up with stat redundancy.

It happened to me a few years ago - however they made us redundant on the spot with no notice - and we all won a court case and got a payout a few years later. They have a legal requirement to consult with you, and the time period depends on how many people work for the company. All the info should be online

Glad you got your money.
Company employ about 250 people

OP posts:
youveturnedupwelldone · 27/05/2023 18:14

The point of an administration is a protective insolvency measure to try and keep the business trading and either:

trade out of administration (usually requires debt restructure),

be sold out of administration, usually the profitable bits are sold off - an example would be cath kidston's online operation having continued post administration but the shops all closed down. Part of the business continued trading so staff kept jobs, part didn't so those staff were made redundant but it took a while to work out.

Once a company is in a formal insolvency it's time to get out as fast as you can really. There won't be money to pay you I'm sure (mostly it seems to go on administrator's fees...)

But you can claim from the insolvency service for a certain amount of redundancy pay.

This link is a really good explanation.

www.irwin-insolvency.co.uk/what-happens-to-employees-when-a-company-goes-into-administration/

Notjustamum10 · 27/05/2023 23:14

Sorry you are going through this. A similar thing happened to me a few years back and we all got statutory redundancy through the insolvency service.

I imagine each case is different, but we had to wait many months before the statutory redundancy came through.

My advice would be to

A. Make sure you don’t leave anything in your office, I lost spare shoes, phone chargers, photos, makeup etc I’d left in my desk when we were refused access back in.
B. Backup all important info from your work computer and email - anything personal, anything you may need for a future job application, holidays and expenses owed.
C. Get non-work contact details for bosses, colleagues, etc to keep in touch if you get locked out of work phones and email systems.
D. Get your CV together, LinkedIn updated, etc in case you are made redundant. Sign-on with the job centre immediately if you are, they will cover NI contributions and assess benefits for you.

Good luck with it all, it’s a stressful position to be in.

Original poster
mirages08 · 28/05/2023 19:12

youveturnedupwelldone · 27/05/2023 18:14

The point of an administration is a protective insolvency measure to try and keep the business trading and either:

trade out of administration (usually requires debt restructure),

be sold out of administration, usually the profitable bits are sold off - an example would be cath kidston's online operation having continued post administration but the shops all closed down. Part of the business continued trading so staff kept jobs, part didn't so those staff were made redundant but it took a while to work out.

Once a company is in a formal insolvency it's time to get out as fast as you can really. There won't be money to pay you I'm sure (mostly it seems to go on administrator's fees...)

But you can claim from the insolvency service for a certain amount of redundancy pay.

This link is a really good explanation.

www.irwin-insolvency.co.uk/what-happens-to-employees-when-a-company-goes-into-administration/

Thank you very much

OP posts:
Original poster
mirages08 · 28/05/2023 19:13

Notjustamum10 · 27/05/2023 23:14

Sorry you are going through this. A similar thing happened to me a few years back and we all got statutory redundancy through the insolvency service.

I imagine each case is different, but we had to wait many months before the statutory redundancy came through.

My advice would be to

A. Make sure you don’t leave anything in your office, I lost spare shoes, phone chargers, photos, makeup etc I’d left in my desk when we were refused access back in.
B. Backup all important info from your work computer and email - anything personal, anything you may need for a future job application, holidays and expenses owed.
C. Get non-work contact details for bosses, colleagues, etc to keep in touch if you get locked out of work phones and email systems.
D. Get your CV together, LinkedIn updated, etc in case you are made redundant. Sign-on with the job centre immediately if you are, they will cover NI contributions and assess benefits for you.

Good luck with it all, it’s a stressful position to be in.

Good advice, thank you
No idea what's happening yet...Bank hol and everything but should know more by midweek

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